Top 10 Metro Areas with the Highest Foreclosure Rates

October 26th, 2012

It is no secret that loan defaults have taken their toll on the housing sector in the United States. Many government relief initiatives have been extended to distressed homeowners in an effort to minimize foreclosures. One of the most popular choices for struggling borrowers has been the bad credit FHA loan because it offered low interest rates and lenient credit requirements. The Federal Housing Administration continues to insure loans for people with fico scores as low as 500.

When Will Home Foreclosure Rates in the U.S. Fall?

While the number of foreclosures in the nation has fallen to half the peak rate of the crisis, people are still losing their houses to the bank in certain regions at high rates. According to RealtyTrac, from January 2007, shortly after the housing bubble exploded, through September 2012, about one in 29 housing units have been foreclosed. In Sept. 2012, there were 180,000 housing units with foreclosure filings. During the peak of the foreclosure crisis, March 2010, there were 367,000 properties with a foreclosure filing.

However, Daren Blomquist, vice president at RealtyTrac, said a “normal” housing market will have about 75,000 properties with foreclosure filings. “We have more than halfway back to normal,” he said. California is still mired in foreclosures, as the seven cities with the highest foreclosure rates using data from Sept. 2012 are all in the Golden State.”It speaks to the depth of the housing crisis in those markets,” Blomquist said.

As a result, there has been a 45% increase in short-sales during the first five months of 2012, compared with the same period in 2011. RealtyTrac has measured the average time it takes from when banking institute start a foreclosure to when a property is foreclosed. Nationally this process averages 380 days. However in states like Illinois and New York, that foreclosure process averages nearly to 700 days.

Here are the metropolitan areas with the ten highest foreclosure rates: